5 Ways to Save for an Emergency Fund

People often ask me, “How do you save up for an emergency?” “How do you have extra money saved up?”

It is hard to save up if you are not used to it, but you can CHANGE IT!

I always tell people you have to be creative and now is the time to be creative since we are locked in our homes for 30 days or maybe longer. It takes 30 days to form a new habit, why not have it be one you can benefit from for the long run? I know you can do it! Hundreds of people just like you have turned their spendings into savings, which brings me to the first way to save up.

Turn Spendings into Savings

During your monthly budget, you get to plan out where your money goes. Tell your money where it goes just like we tell our spouse what to do and where to go. Kidding! Well…kinda? Personally, I love this part of budgeting! It gives me the free will to go shopping — like when Old Navy has their 50% off everything sale! But this article isn’t about shopping, it is about finding the money to turn it into savings.

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Here is what worked for me and I am sure it will work for you too. I ask myself these questions…

  • What do I value?
    • I value the Lord and go to him for all my finances. In Proverbs 27:12 it states, “A sensible man watches for problems ahead and prepares to meet them. The simpleton never looks and suffers the consequences.”
  • Savings for an emergency and not having to worry or take out?
    • Personally, if I felt lazy after work I would choose take out, but I think not having to worry would be better. I hate when something comes up and I am not prepared for it financially, so definitely savings.
  • Happiness for the long term or a short amount of time?
    • Easy answer for me — happiness for the long term. I find happiness for the long term, because we are just passing through earth, but I do not want my family to have a burden when I leave the earth. I want to make sure I leave them financially set to pay for my expenses when I pass away. I have seen many times family’s suffer financially because of a loved ones death.
  • The feeling of security or the feeling of greatness for the short term with shopping or buying something?
    • I learned in college that humans need a feeling of safety always. It is number two in the Maslow hierarchy of needs. The first is ensuring we have basic needs (shelter, food, sleep, water) and then safety. It allows me to have control in my life and I am definitely a type A who needs control and order.

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Set up an Automatic “Bill” to yourself

This is pretty easy to do now with online banking. I use Capital One 360 because I can set up several funds to save for. Examples of bills I have done over the past decade. The first automatic “bill” to myself was the emergency bill like when my car used to break down, the unexpected came up, such as now with the coronavirus and out of no where we do not know what is going on.

Also, have pretended to have a car payment. I deep dived into this when I did not have a car payment anymore, and I set up an automatic “car payment” to myself in my auto savings fund. Currently, a small “house payment” for my house fund.

Ally.com has a system similar to Capital One 360 where they have “buckets” for several savings and its in 1 account.

Downsize and Sell

We recently did this — it has been a year since we moved tiny and downsized our lives! We made over $1,800 for downsizing our stuff. We sold our items on facebook marketplace. Make sure you take a good photo of the items plus you will sell it if it’s marketed well. I always suggest to list it higher than you want to make off of it, so you leave negotiating room. I buy a lot of my items off of facebook marketplace and even found myself selling it for more than I bought it for! Yes, I made money off of items!

Even though we live tiny, we often find ourselves still downsizing and selling items. Last week, we sold Tom’s old chests for $20 to a college student traveling home and needed storage. It is a perfect time to do this since its spring cleaning time and we are quarantined in our homes. Someone else’s trash is another’s treasure!

Unexpected Income

This happens to us somewhat often, to be honest, and I believe it is because we give monthly. God states in Luke 6:38 “Give, and it will be given to you…” I want to share some items we have been blessed with recently. Last year, we paid for the tuxes for the groomsman as a gift from us and we were blessed with finding a place to park our tiny home for a cheap amount (360 per month!) We also gave extra to our pastor for marrying us and we were blessed with an amazing amount of money for our wedding and we even got a free night stay at the beach on our honeymoon. These are just a few examples of how God has blessed with unexpected income with giving more.

The unexpected income can also be bonus’s, raises, tax return (even though you want this to be as close to zero as possible). We receive our bonus in March so this was a nice cushion for us, but I always ask God who I should bless and give 10% to 15% of it to someone else who needs it more than I do. For raises, I find this the easiest to add to your savings by 1 -2 % and not notice it by either adding a percent to your emergency fund or even your retirement account. This can be done in your direct deposit.

Side Hustle

How to make money other than your full time job. I did this a lot when I was trying to get myself out of debt right out of school. I made sacrifices. I worked a lot and missed out on family events, but my family knew I would work so we planned other days to get together. Personally, to beef up my emergency fund I worked at the local baseball stadium, the grocery store, babysat, and taught Jazzercise.

What about if you found a side hustle of watching children while the essential workers have to work crazy hours. Most daycare centers are only open 6 AM – 6 PM, and most essential workers have to work 24/7 including weekends. Another side hustle could be using your hobby’s as a talent and selling it. My husband sells his jewelry on Etsy — check it out! Another side hustle could be working at a retailer like Amazon or Kroger until your job comes back around. Side hustles are just for season of life to get a jump start on a goal like saving an emergency fund.

These 5 ways to save for an emergency fund are tried and true ways I saved up for an emergency fund. My husband even completed these 5 steps to save up his emergency fund before we got married! I encouraged him to use his creativity to sell his necklaces and he continues to sell them consistently even though we have our emergency fund 100%. As I said in the beginning, it becomes a habit and it makes you feel good about what you’ve accomplished that you just want to keep on doing what you are doing to save and make a difference in what you believe in.

Luke 14:28 For which of you, wanting to build a tower, doesn’t first sit down and calculate the cost to see if he has enough to complete it? A verse to remind us we should sit down and calculate how much you should save for your emergency.

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